Balance of payments: May 2021

07/21/2021 – Press releases

• In May 2021, the current account deficit widened over one year, mainly due to a deterioration in the balance of goods and, to a lesser extent, in the balance of services, which was partly offset by an improvement in the accounts. primary and secondary income.

• In January-May 2021, the current account deficit widened over one year, due to a deterioration in the balances of goods and services and in the secondary income account, which was partly offset by an increase in the surplus in the income account. primary.

Current account

In May 2021, the current account shows a deficit of 1.4 billion euros, up 477 million euros over one year.

The increase in the goods balance deficit is explained by a larger increase in imports, in absolute terms, than in exports. However, exports increased by 59.6% and 25.9% at current and constant prices, respectively, while imports increased by 56.2% and 27.3% at current and constant prices, respectively. In particular, exports of non-oil goods increased by 29.5% and 23.2% at current and constant prices and non-oil imports by 40.4% and 37.3% at current and constant prices, respectively.

The surplus in the services balance registered a slight decrease, due to a deterioration in the transport balance. In contrast, the travel balance and the balance for other services are improving year over year. The arrivals of non-residents and the related receipts increased by 413.7% and 286.2% respectively, under the effect of base effects following their weak levels in 2020. The surplus of the balance of transport has decreased by 30%.

In May 2021, the surplus in the primary income account more than doubled, mainly due to a year-over-year shift in net payments to net interest, dividend and profit revenue and, secondarily, due to an increase of receipts net of other primary incomes. The secondary income account deficit narrowed year over year, mainly due to lower government payments.

In the January-May 2021 period, the current account deficit increased by 534 million euros over one year to 6.2 billion euros.

An increase in the goods balance deficit is due to the fact that imports have increased more than exports in absolute terms. Specifically, exports increased by 27.8% and 15.5% at current and constant prices, respectively, while imports increased by 20.1% at current prices and 5.1% at constant prices. It should be noted that non-oil exports and imports of goods grew at about the same rate (21.5%) at current prices, while at constant prices they increased by 18.8% and 20, respectively. 8%.

A decrease in the surplus in services is explained by a deterioration in the balance mainly for transport, but also in the balance for travel, while the balance for other services is improving. The arrivals of non-residents and the corresponding receipts fell respectively by 65.5% and 51.2% year on year. Net receipts from maritime transport fell 6.7%. Finally, the surplus in the primary income account more than doubled, due to the decline in interest, dividend and profit payments, while the deficit in the secondary income account widened as a result of the decline. increase in government payments.

Capital account

In May 2021, the capital account surplus was virtually unchanged from year to year and stood at 202 million euros. In the January-May 2021 period, the capital account surplus decreases from one year to the next and stands at 423 million euros, due to an increase in payments from other sectors (excluding general government).

Current account and combined capital

In May 2021, the deficit of the combined current account and capital (corresponding to the external financing needs of the economy) increased to 1.2 billion euros, against 723 million euros in May 2020. January-May 2021 period, the cumulative current and capital account deficit increased by 705 million euros over one year and stood at 5.7 billion euros.

Financial account

In May 2021, under direct investment, the external assets of residents increased by 122 million euros and the external liabilities of residents increased by 640 million euros. The most important transactions were the participation of Paulson & Co. Inc. (USA) in the capital increase of Piraeus Financial Holdings SA and the increase of the participation of Reggeborgh Invest BV (Netherlands) in ELLAKTOR SA

In terms of portfolio investments, the increase in the foreign assets of residents is almost exclusively due to an increase of 3.2 billion euros in the holdings of residents of foreign bonds and Treasury bills. The increase in the external liabilities of residents is explained by an increase of 717 million euros in the holdings of Greek equities of non-residents and of 662 million euros in the holdings of non-residents in government bonds and government bonds. Greek treasures.

Under other investments, the increase in foreign assets of residents reflects an increase of 621 million euros in loans granted to non-residents and the statistical adjustment (592 million euros) linked to the issuance of banknotes. The increase in external commitments mainly reflects an increase of 2.8 billion euros[1] in the outstanding debt to non-residents and, incidentally, the statistical adjustment (592 million euros) linked to the issuance of banknotes.

In the January-May 2021 period, under direct investment, the external assets of residents increased by 640 million euros and the external liabilities of residents, which represent the direct investments of non-residents in Greece, increased by 1.7 billion euros .

In terms of portfolio investments, the increase in foreign assets of residents is mainly explained by an increase of 2.0 billion euros in the holdings of residents of foreign bonds and Treasury bills and an increase of 952 million euros. of their holdings of foreign stocks. The increase in external liabilities is attributable to a € 1.4 billion increase in the holdings of non-residents of Greek government bonds and treasury bills and a € 599 million increase in their holdings of shares. Greek.

In terms of other investments, the increase in foreign assets of residents reflects an increase of 2.1 billion euros in loans granted to non-residents, partially offset by a decrease of 1.3 billion euros in deposits and pensions of non-residents. residents abroad. The increase in external liabilities mainly reflects an increase of € 6.0 billion in outstanding debt to non-residents, partially offset by a decrease of € 544 million in deposits and pensions from non-residents in Greece (TARGET account included).

At the end of May 2021, Greece’s reserve assets stood at 9.2 billion euros, compared to 8.7 billion euros at the end of May 2020.

Related information: Balance of payments data for June 2021 will be released on August 20, 2021.

Related link:

Balance of payments table